The contagion will spread

All eyes have been on the residential mortgage-backed sector but, as our new columnist points out, commercial real estate may be the next to provide some nasty surprises

With the world's central banks taking an aggressively accommodative stance to the recent credit crisis, the question now is whether there are still more shoes to drop that could challenge the central banks' sway over the markets. Unfortunately for Bernanke and his counterparts, and for the markets in general, two clear risks remain.

First, CDOs have only just begun to see downgrades; over time the rating agencies will be forced to move on more and more CDOs, especially CDOs of ABS that are highly